I absolutely agree 100%...websites have become the most important sales tool as they are always (or at least should always be) accessable, whether you are home, at work, or sitting in traffic using your cell phone (while still paying attention I hope

) It just comes down to what it will cost you or the importance of your site. But, all new "netizens" will learn after that one bad experience that cheapest is not always best. Thats when companies who are not the cheapest around, but have become known for their reliability and support will prevail and get the customers who are not looking for a steal.
I also realize that everybody must be money concious and people cannot simply afford to pay anything, but there needs to be limits. Asking to pay $1 for 20GB of space and 150 GB of bandwidth will be regreted. I also think that people who are new to the industry don't really understand how much a certain plan is supposed to cost and they try to find the lowest price they possibly can for what they need, not even thinking to cinsider reliability as an issue. It is obviously understandable to look for the lowest price, as this is exactly what you would do when you shop for a new car, but all Fords are from the same company. All hosting plans are not. Basically, I think that one of the issues many first time hosters experience is due to a lack or education and/or research of the industry and they end up jumping into a plan that may have even forced them to pay anually because it was so inexpensive and because they did that, they are stuck with the horrible service of that host for a whole year when they could have switched hosts in a month.
Also as a side note, many spammers and hackers look for the cheapest hosting to launch their attacks, so even though very inexpensive companies may have a lot of clients, they could be putting themselves and their customers in a risky situation, which could spell out the end of their business.